By Rick Pearson
In order to provide a comfortable working environment for your employees, especially this time of year, your air conditioning system needs to be running at its intended capacity, with all components working properly. Most systems fail at some point, which results in tension and frustration on for all parties; either you call your property manager and they call their HVAC contractor, or you call your contractor directly. When the days start to get warm, people start to use their cooling systems, and contractors get so busy that it can take several hours or more to get someone onsite to evaluate a problem. If any parts are needed, it could be days before a system is fixed.
If you lease office space where there is a professional property manager the obligation is always on the landlord to fix a broken HVAC system. They typically do in a reasonable amount of time. If you lease industrial or flex space, or if you are in a multi-tenant office building with separate HVAC units for each space, then you may be responsible for the HVAC system yourself. Sometimes that is advantageous because you don’t have a middleman to go through. However, if something major needs to be fixed, you might also have to pay for it. If the system is old and at the end of its useful life, you may be looking at a substantial cost to replace it. This may not seem fair, especially if you just moved in a year or two ago.
Be sure you fully understand what your lease says about who is responsible for the HVAC system: both on-going maintenance and repairs or replacements. Most industrial leases, in my opinion, put undue responsibility onto the tenant. Landlords and their brokers will argue that the lessee is the only one using the HVAC so, accordingly, they need to be responsible for it, in case they abuse it or don’t maintain it properly. I agree that there needs to be a provision to ensure the system is maintained properly, and a way (directly or through CAM charges) for the tenant to bear those costs. However, even properly maintained systems break down, and the older they are the more prone to problems they may be, so the tenant should not be obligated to pay for repairs and replacements.
The bottom line is this:
• Know the age and condition of the HVAC system before you lease space or renew your current lease.
• Evaluate the useful life of the unit(s) compared to the term of your lease.
• Be sure your lease provides for language that requires the system to be in good working order at the time your lease commences.
• Try to put the entire cost of both maintenance and repairs on the landlord.
• At the very least, limit your exposure to some amount per year, calculated considering the useful life of the system, its age, and your lease term.
• Be certain an experienced HVAC contractor is doing regular maintenance, and that any recommended parts are being replaced.
HVAC systems are pretty simply if you understand how thermostats work and which areas/rooms are controlled by each unit. Have your HVAC contractor or building engineer explain this to you, and make sure all your employees understand how to correctly operate the system. Have a floor plan made showing which thermostats control each area. Most importantly, remind people that if the room temp is at 75, turning it to 72 will cool the room just as fast as turning it to 60 will. If you set a thermostat unreasonably low, the system may become overtaxed trying to make the air too cold…which may lead to system failure, accusations of abuse or incorrect operation, and may put the responsibility for its repair onto the lessee.